Indian Billionaire Mukesh Ambani's Firm Will Explore Blockchain Platforms and CBDCs
India has already made significant progress towards a wholesale and retail CBDC even though a full-scale launch is awaited.
Reliance Industries chairman Mukesh Ambani on Monday announced that the conglomerate's financial services division Jio Financial Services may also start offering blockchain-related products as well as digital rupee.
"JFS products will not just compete with current industry benchmarks but also explore path-breaking features such as blockchain-based platforms and CBDC. They will adhere to the highest standards of security, regulatory norms and ensure protection of customer transaction data at all times," Ambani told shareholders at the company's AGM.
The RBI has devised the central bank digital currency (CBDC) known as e-rupee as a digital alternative to physical cash - using blockchain distributed-ledger technology. As of June 2023, there were 1.3 million customers and 0.3 million merchants using CBDC.
The RBI had last year begun experiments on both the wholesale and retail versions of e-rupee using the blockchain distributed-ledger technology, as an alternative to cash.
Last year, RBI had launched pilots of CBDC in both wholesale and retail segments. The pilot in the wholesale segment, known as the Digital Rupee -Wholesale (eâč-W), was launched on November 1, 2022, with the use case being limited to the settlement of secondary market transactions in government securities. Use of (eâč-W), is expected to make the inter-bank market more efficient.
Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk. The pilot in the retail segment, known as digital Rupee-Retail (eâč-R), was launched in December last year.
The eâč-R offers features of physical cash like trust, safety and settlement finality. Like cash, the CBDC will not earn any interest and can be converted to other forms of money, like deposits with banks.
Bankers had raised concerns about the project saying that in its current form, they did not see any benefits of CBDCs which were similar to internet-based banking transactions and saw Unified Payments Interface (UPI) as a tough competitor for the retail use of e-rupee.